November 03, 2020
Transcript of November 03, 2020
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“Wonderla Holidays Limited
Q2 FY2021 Earnings Conference Call”
November 03, 2020
ANALYST: MR. ADHIDEV CHATTOPADHYAY -
ICICI SECURITIES LIMITED
MANAGEMENT: MR. ARUN K. CHITTILAPPILLY – MANAGING
DIRECTOR – WONDERLA HOLIDAYS LIMITED
MR. SATHEESH SESHADRI – CHIEF FINANCIAL
OFFICER - WONDERLA HOLIDAYS LIMITED
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Moderator: Ladies and gentlemen, good day and welcome to the Q2 FY2021 Earnings
Conference Call of Wonderla Holidays Limited hosted by ICICI
Securities Limited. As a reminder, all participant lines will be in the
listen-only mode and there will be an opportunity for you to ask questions
after the presentation concludes. Should you need assistance during the
conference call, please signal an operator by pressing “*” then “0” on
your touchtone phone. Please note that this conference is being recorded. I
will now hand the conference over to Mr. Adhidev Chattopadhyay of
ICICI Securities. Thank you and over to you Sir!
Adhidev C: Good morning everyone. On behalf of ICICI Securities, I would like to
welcome everyone to the Q2 FY2021 Results Call of Wonderla Holidays.
From the management of Wonderla today, we have with us Mr. Arun K.
Chittilappilly, the Managing Director and Mr. Satheesh Seshadri, the
Chief Financial Officer. I would now like to hand over the call to the
management for their opening remarks. Over to you Sir!
Arun K. Chittilappilly: Good morning everyone. Thank you for the introduction.
Welcome you to the conference call to discuss the Q2 results of Financial
year 2021. We realize that many of you are still working from home and
we hope that everyone stays safe and healthy.
The COVID-19 pandemic continues to have an unforeseen impact on
individual’s families, communities, businesses and the world at large as
you may already know. Let us take a moment to salute the people who are
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on the frontline, working around the clock to make sure that we are all
safe.
Our parks remained closed for operations during the second quarter due to
the lockdown. However, the entire team has been working on alternate
scenarios preparing for the resumption of the businesses. We used this
time to implement significant changes in the way we operate, reengineer
our processes, expand various lines of business, and incorporated changes
in our leadership and board of directors.
First, let me talk about certain changes to the leadership team. Mr. George
Joseph, who was our JMD, has retired from active management due to the
travel and heath related restriction caused by the pandemic. He is now a
Non-Executive Director on our Board. In his tenure as Joint Managing
Director, he initiated some great cost optimisation efforts and setup
foundations for expanding into new cities. The company recorded its
highest ever EBITDA and significant margin expansion and profit
generation. We thank him for his stellar leadership.
Now I have taken over as the Managing Director and I am excited to lead
the company on its next journey of growth and transformation. I will be
partnering with one of our Board members, R. Lakshminarayanan, who I
also consider as a mentor. He has been designated as Non-Executive Vice
Chairman. My father Kochouseph Chittilappilly, our Founder and
Promoter, has retired from the Board. He will continue to guide us as a
mentor and Chairman Emeritus.
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At Wonderla we are financially strong, resilient, committed and have a
competent and dedicated workforce. We recognise that the business
environment is changing in a fundamental, irreversible and rapid manner.
I am now preparing with multiple strategic initiatives not just to anticipate
the benefit from this change, but to actively drive it for our short and long-
term competitive edge.
The leisure, entertainment and experiemential businesses will grow
substantially and we see a clear trend towards customers willing to pay a
premium for world class experiences. In a world where people have been
confined to their homes for over six months, there will be a significant
demand for hygienic, healthy and active outdoor activities. We are eagerly
waiting to welcome back our guests to our parks and resorts.
We are in the process of an enterprise wide digital transformation. We
have just kick started the process. It will impact our effectiveness and
efficiencies across every function and department. The technological
advances focus on data analytics and creation of more interactive dynamic
and immersive attraction, Wonderla is moving towards a more
personalized and magical experience. We have been regularly engaging
with customers throughout the lockdown via social media, but we would
like to step up the growth efforts in a significant way going forward.
During the lockdown we have leveraged our existing infrastructure and
in-house capabilities for some experiments in new business areas like a
cloud kitchen, which we have started in the month of June. Currently, we
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have four outlets, two in Bengaluru, one each in Hyderabad and Cochin,
still at a very incubation stage, so we are still learning as we go along.
In Q2, we also test launched a new initiative called Wonder Garden, a
plant nursery-based offering. It was inaugurated by my father and the
Founder, Mr. Kochouseph Chittilappilly. It offers a range of indoor and
outdoor plants, we already have gardens set up in all of our parks to
maintain our parks. We felt that this could be something that people could
be looking at in the future, but of course we want to do it in a slightly
different way and it is still in incubation stage.
Many entertainment parks across the world have resumed operations,
albeit on a much smaller scale. Some parks saw a good response during
the Halloween festivities last week. Despite suffering crippling growth
during the pandemic, I think the global industry looks optimistic.
On September 30, 2020 under unlock 5.0, Ministry of Home Affairs has
issued guidelines for cinema halls, entertainment parks, foods and so on
and so forth where we are planning up our parks around middle of
November. Last week guidelines were extended till November 30.
Accordingly we have resumed the operations at our resort in Bengaluru
from October 15.
As a gesture of respect and gratitude to the COVID warriors, we will be
offering free entry to them from November 9 to November 12 in our
Bengaluru Park. The park will be opened to general public from
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November 13. We have strengthened our safety protocols and the details
are in the presentation. All our rides have been maintained in optimal
conditions throughout the lockdown. As rides are spread over a vast
stretch of land, social distancing measures will be easier to implement.
During these unprecedented times, we continue to optimise our costs and
our team efforts have led to significant drop in expenses. We have
continued to optimise our costs and we have reduced our costs to a bare
minimum. As a result of these measures our monthly expenses have
reduced from 10 Crores in March 2020 to less than 3 Crores in August
2020. Amusement Parks fulfill a fundamental and universal and timeless
human desire to roam, play and experience thrills and as a cohort, for
which there will not be a real substitute.
We do not see a permanent change because of the pandemic for the
amusement park industry. I think they will come back. They will continue
to provide unique irreplaceable source of experiences to cherish for a
lifetime.
As a team we are united and optimistic to face the challenges and benefits
from the opportunities and our team spirit and Indian culture binds us to
understand the environment stronger. Thank you very much.
Moderator: Thank you very much. We will now begin the question and answer
session. The first question is from the line of Rahul Ramaswamy from
Perfect Research Fund. Please go ahead.
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Rahul Ramaswamy: Thank you for the opportunity Sir. Sir, I have some questions, I will
be listing it together. Sir, assuming we are operating in normal times free
of COVID in the long run, my first question is; Kochi’s population is 30
lakhs and our target audience is generally the local population. What do
you think is our long-term potential for the Kochi Park in terms of annual
footfalls? Globally, parks have a merchandising contribution of 25% in
revenues, how are we looking to increase our share in this vertical? For
example, like Disney are we trying to create our own mascots or use
Indian characters? Can you throw some light on customer loyalty schemes
and the one customer analytics, do we maintain data on repeat customers
and spending patterns? Lastly, is it right to look at global parks in terms of
size of opportunity given the climate is not extreme there, and given our
extreme summer and winters do you think the addressable market is much
less in India?
Arun K. Chittilappilly: I think India does not have extreme climate, especially where our
parks are situated. We have tropical weather, the right place to setup an
amusement park. If we look at all the global parks, the ones which are in
tropical weather are the ones which usually give the best business. It will
be open throughout the year. Our parks are all in areas where we can be
open 365 days so that takes care of one question. We do not look at only
footfalls from Cochin. It may have a population of only 30 lakh, but we
get about a million visitors in our park. It does not mean one part of the
city coming to our park every year. Four cities attract footfalls from that
area, and I do not think we have exhausted our market potential. Currently
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we do not have much data, we have a loyalty program, but it is a
predigital, old kind of loyalty program. We have about 1,50,000 people
who are in the loyalty program, We are now going to revamp that
completely to a more digital system. We have just started work on that, so
I cannot speculate more on that right now. I hope I have answered all the
question.
Rahul Ramaswamy: Sir, if you could throw some light on the merchandize ?
Arun K. Chittilappilly: Merchandize is an area where we have not really focused on it yet.
There is a huge scope to improve that as well because when people come
to an amusement park, they are not making rationale decisions, they are
all emotional decisions. So, there is a lot of spending and we need to be
able to capitalize on that.
Rahul Ramaswamy: Thank you.
Moderator: Thank you. The next question is from the line of Tejas Shah from Spark
Capital. Please go ahead.
Tejas Shah: Three questions from my side. First, on the reduced offering and opening
up parks from November 13. What will be the breakeven footfalls that
will need to achieve our neutral state on profitability?
Satheesh Seshadri: Good morning Tejas. We are going to re-open Bengaluru park on
November 13 to the guests at a special price, which will be in the press.
Only the land rides will be open and not the water park. This we will be
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extending it for a few weeks, and this is to reestablish and opening our
park. Post opening, when we have all the three parks running, our cash
break even will be around 1300 to 1350 per park per day.
Tejas Shah: But we will be operating only for weekends, not the weekdays initially?
Satheesh Seshadri: Initially that is the plan when we start the Bengaluru park on
November 13, to open only Friday through Sunday and holidays and only
dry park is allowed now by the government of Karnataka. So henceforth
there will be a limited ride park operations and experience to the guests. I
think going forward, the government will slowly open up water parks. We
are awaiting the approval from the Telangana government and SOPs to
allow us to open the park and in Cochin as you know, Section 144 is
active in many parts of Kerala, so we are not opening now. So once
everything stabilizes, we are planning to open other parks. Once all the
three parks are operational and we are at the optimum level, we will be
having a cash breakeven point of around 1300 per park per day.
Tejas Shah: Second question Arun, in the opening remarks you spoke about some of
the costs cutting measures that you have taken. Some of the cost cutting
across businesses are tactical in nature and not structural. If you can call
out some of the cost measures that we have taken, which will remain with
us even when the normalcy comes back?
Arun K. Chittilappilly: In fact our biggest cost is people cost, we have a significant
number of contract employees who we are not paying salaries right now.
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We are only paying salaries for some critical employees and of course
people on our payrolls but everyone has taken a pay cut. So, I think they
are tactical, but that is what we need to survive. So, once the business
comes back, I think a lot of the costs will come back, but I am hoping that
it will be in a phased manner, we will have to wait and see.
Tejas Shah: That measures like shifting your head office?
Satheesh Seshadri: As Arun Sir, said, on a normal running the major expenses will be the
wages and employee cost, staff costs and other operational expenses.
Once the park operations resume we have to see how we will take it
forward. Wonderla philosophy and DNA stands on cost prudence. So, we
have always been a very cost prudent company and you will not see a big
change in that, but yes there will be some efficiency improvement to this.
Tejas Shah: Sir, just last one on Chennai Park has the tax benefit extended and what is
the status of the park? How much debt we will need to complete the
projects in Chennai and Odisha?
Arun K. Chittilappilly: Because of COVID we have not been able to start work there and
so we will renegotiate that whole thing with Chennai Government
because we feel like the LBT is an unfair tax burden on the amusement
park. Once that clearance is approved, we will start construction and then
at that point we will decide whether we need debt. So that is the way we
are looking at it.
Tejas Shah: Sir, Odisha?
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Arun K. Chittilappilly: Odisha is still at a very early stage. So, whenever we are able to
finish our preliminary work, we will proceed with that. I do not see as a
big ticket investment in Odisha. But for Chennai we will definitely relook
at the tax burden because that will have an impact on the business of the
company. So, we will be going back to the government.
Tejas Shah: That is all from my side. Thanks and Happy Diwali to the whole team.
Moderator: Thank you. The next question is from the line of Kaustav from Rare
Enterprise. Please go ahead.
Kaustav Bubna: I had question on this Chennai land. Just wanted to get a little more in the
detail so, currently we have the land and how long does it takes for
construction? Let us say there are no hindrances in the way, how long
does it take to construct a park?
Arun K. Chittilappilly: It takes about 18 months, one-and-a-half years.
Kaustav Bubna: You had started construction right before the lockdown happened?
Arun K. Chittilappilly: We have just finished land development, we still have not got
approval from the government to start constructions yet, so whatever
delays we are facing right now, are all delay from the government.
Kaustav Bubna: But they had agreed to defer that tax by five years after your parks is
opened right, so where are we on that. I mean what makes you think that
they would not agree to postpone it?
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Arun K. Chittilappilly: We have to get it in writing because, there is a huge tax
implication if it does not get done. If we invest in the project, it is a huge
loss for us and we are thinking about renegotiating, as in our current deal
we are not happy with the five years window. We actually asked for a
lifetime waiver of the tax LBT, because we feel that the tax is too high, so
that negotiation is still going on, so once we have some clarity on that, we
will start construction, but until such time we will not.
Kaustav Bubna: Is there a possibility that this land just goes unutilized and we have to sell
it in case they do not cooperate or do you think that is a low probability?
Arun K. Chittilappilly: That is a very low probability, very unlikely, because they have
invited us to set up the park. But as with all government things, there is no
precedent to this also, there is no other company who has done this, so I
think we will have to pave the way for this. We do feel that a large ticket
investment cannot have LBT, over and above tax on the tickets.
Kaustav Bubna: On the Odisha Park, this will be on lease rate?
Arun K. Chittilappilly: Odisha Park land is on lease so practically there is not much land
cost. We just have to look at the market potential and then decide. But
again all that has been delayed right now, because we are not able to do
any of those kind of surveys on the city.
Kaustav Bubna: Would you be able to tell me how much of the total fixed assets on your
balance sheet is the Chennai land?
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Satheesh Seshadri: Rs.109 Crores including the land.
Kaustav Bubna: How much is the land?
Satheesh Seshadri: Land and land improvement is about Rs.88 Crores, Rs.109 Crores is
the overall Chennai capex as on date.
Kaustav Bubna: Thanks.
Moderator: Thank you. The next question is from the line of Manoj Dua from
Geometric Securities. Please go ahead.
Manoj Dua: Good morning Sir. My question is little bit of longer term in nature, after
IPO I heard interview in which you said the Wonderla model has proved
very viable, now the strategy is to replicate in many locations at faster
pace, so what has been learning in last few year in terms of scalability?
Arun K. Chittilappilly: I think the biggest learning for us is the tax issues, because when
we started this, when we went for IPO, the average tax on ticket on
Wonderla was about 5% to 8%. Now because of GST it is about 18%,
which is very high and places like Tamil Nadu, they charge extra tax 10%
which makes it 28%, which practically makes project unviable. So that is
the main change that and has slowed us our growth down. We are trying
to rectify that, especially in Tamil Nadu. We are also trying through the
association to change the GST slab for entertainment parks itself, because
we feel that 18% tax on the ticket is too high. On something which is so
high in capex. Other than that I think the people have propensity to spend
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and it is getting stronger. The other big change I see is that a lot of people
are more digitally savvy now, in our marketing we need to be more
digitally savvy to sell and to retain loyal customers.
Satheesh Seshadri: To add to what Arun Sir said, we are looking at asset light model
approach, Odisha Park. Unlike the Chennai park where would be
spending over Rs.300 Crores, Odisha park capex will be close to Rs.100
Crores,
Manoj Dua: Thank you.
Moderator: Thank you. The next question is from the line of Nitin Awasthi from East
India Securities. Please go ahead.
Nitin Awasthi: Thank you for the opportunity. I just have a question on the new
businesses that the company is focusing on, Wonder Kitchen. If you could
just explain the thought process of the company behind this venture, how
scalable does you think it is, how big can it get, how much investment
would it require and what was the thought process going into this
business?
Arun K. Chittilappilly: The thought process is very simple, because when we had no work
to do for all our staff for so many months, we just thought of something to
do which will keep some of our staff occupied and this is practically zero
investment and still generate alternate source of income. There is really no
investment for us to do this, we do not even need prime real estate but I
think what we have learnt is that it is a highly scalable model. I think
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people are willing to spend money on food. As a brand if you are able to
crack, with scale it will be a huge success. We can replicate this with
minimum investment and it gives us a couple of advantages. It gives us a
high recall value in customers mind, because we are not present, we have
a very low repeat business, people do not go to amusement parks every
day or every week or every month. Hence Wonder kitchen will help us to
occupy more mind space of our target customer and also help us to cross
sell and up sell amusement park and resort opportunities. It is still too
early for us to say what is the market size. We are still trying to perfect the
model first. Once we have that we will give you more updates on it.
Nitin Awasthi: When you say things like Cloud kitchens, would you be leveraging the
app based delivery model or using the third party apps selling your
products through them?
Arun K. Chittilappilly: We do both. Currently half of the people come and buy directly
through us and I think about 30-40% happens through Swiggy and
Zomato. I think Swiggy and Zomato are now growing faster, because we
are a new brand with new products, so it takes its own time to grow, so I
think that we will be using both channels.
Nitin Awasthi: Are the four kitchens that you are operating right now all breakeven?
Arun K. Chittilappilly: Sateesh will have more data on that.
Sateesh Seshadri: Not actually because due to COVID situation there have been some
restrictions in some of the areas. We have also now geared up our
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marketing initiatives with the third party service providers and
aggregators.
Nitin Awasthi: In all these cities are you competing with somebody on something, is it?
Because you are a very big company which has entered this space. So,
when you enter this space and bring a lot of credibility. Some people do
not know who they are ordering from Swiggy, but if they order from you,
they know the hygiene etc., would be of higher standards, because you
already have an established brand. So, are there people or outlets who you
are competing with?
Arun K. Chittilappilly: Not really. That is the funny thing. I mean, you are competing
mostly with local cloud kitchens and very small companies. That is why I
said it is a very new area for us, completely new. We are not really selling
online on apps and it is completely new, but I think there is a lot of
potential to put cost of doing this is very, very low and breakeven happens
soon. Practically the reason why we are not breaking even now is because
we are trying different experiments to see what people want. We want the
food that we sell in Wonder Kitchen to reflect our brand philosophy of
fun, so that will also take some time right now. We are still working on it.
I think we will probably have an update maybe one or two quarters down
the line not before that.
Nitin Awasthi: Thank you so much for leading the venture. Best of luck for all your new
ventures going ahead.
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Moderator: Thank you. The next question is from the line of Ramakrishnan, an
individual investor. Please go ahead.
Ramakrishnan: I have the same question just now which was repeated basically on the
Wonder Kitchen and Wonder Garden. So, I think that is answered. Thank
you very much.
Moderator: Thank you. The next question is from the line of Meet Jogani an
individual investor. Please go ahead.
Meet Jogani: Are you looking for any other business initiatives like Wonder Kitchen
and Wonder Garden?
Arun K. Chittilappilly: Not immediately because these two are just experiments for us and
the reason why we started them is because the people have been out of
work for so many months and we wanted to engage them in a meaningful
way. But we are also finding that it has low cost, they are in synergistic
businesses, especially the Wonder Kitchen, too early to say anything
about the Garden business. I think the business for food is always going to
be an evergreen business because as long as we are all alive everybody
wants to eat and ordering food online is the new way to live, and I live
like that. Throughout the lockdown I could not get anybody to come in to
cook for me, so I used to depend on all these apps and delivery boys for
my food. So, I think that is a big shift that has happened in India in terms
of people opening up to food from outside. We can probably get into a
nice niche. As I said we are looking at a fun food paradigm for our brand.
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It is too early to say how it is going to evolve because it could change
months to month or day to day as it currently stands. As we have more
experience in this area, I think we will be able to come up with something
interesting and the hope is that we remain salient in our customers mind
for a longer period of time rather than Wonderla being a brand which
people may think about only once a year. So that is the thinking behind it.
We hope to keep experimenting with this for some more time until some
results come out and we will update all.
Meet Jogani: My next question is regarding the debt for our company over a longer
period. Recently we did not borrow much. We built a room purely on our
internal accruals, but on the other hand, capex will go up over the future
am I right? Like just now a participant asked the capex on Odisha Park it
is about 100 Crores but the Chennai park which according to you we
noted a big model we will be spending around 300 Crores odd. So, why
don’t we borrow more and expand? Even if the park is there, we will
expand for the revenue to segment it will take two or three more years for
the revenue to come to the optimum level.
Arun K. Chittilappilly: For us we have no issue with capital. We can always borrow, and
the issue has never been capital. The issue has always been because of the
nature of the business is very brick and mortar and we have actually built
in, we have to work with government and every host city that we are in.
That creates its own set of delays and issues. For example, that is what
happened in Chennai because we have been ready to build the park since
2017, but somehow we have not been able to do it because of delays from
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the government. So, unfavorable tax issues and those kinds of things
created delays for us. I think we probably are the fastest company in the
world to build an amusement park. We built our Hyderabad Park, which is
about 300 Crores park in 20 months, which is the fastest that I know off
and I have been studying this industry for the last 20 years. I do not see
anybody who has been able to build a park faster than that. So building is
not the issue. The issue is all the other stuff that comes before we can
build it. Most of it is beyond our control, so capital has never been an
issue.
Meet Jogani: Any plans to improve our manufacturing capacity, as it is a core
competence? Any plans for that?
Arun K. Chittilappilly: We are manufacturing only for our own consumption. For us that
is almost like our IT, and we do not want to part with that because that is a
part of our competitive advantage. We can build rides and maintain them
at a very low cost compared to our competitors. So, we do not see that as
a big opportunity right now. Maybe later we could think of getting into
manufacturing on a larger scale, but I think currently we have other issues
to solve so we are not focusing.
Meet Jogani: Are you looking for any acquisition opportunities if you get in good terms
like one of the big park of Maharasthra is on the verge of bankruptcy,
your thoughts on that?
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Arun K. Chittilappilly: We are looking at those kinds of opportunities, but we will
probably prefer to partner with them, but not as a full equity partner. We
are open to managing and running parks because that is our strength. We
can run and manage parks well. So, we are in talks with the other players
who have gone down because of COVID and other issues. I think there
are a lot of opportunities flying around right now post COVID. We are
looking at all of them.
Meet Jogani: Thank you. Good luck.
Moderator: Thank you. The next question is from the line of Aditya Bapat from
Equintas PMS. Please go ahead.
Aditya Bapat: Thanks a lot for the opportunity. My question is more related to the long
term policy or strategy of the company. What I want to say is that your
business is inherently one in which people should be coming together and
enjoying together, coming in groups. So, obviously given the current
situation it is totally against what people want right now. So, do you see
that this is just an issue for the next few months till we have a vaccine in
place, or is it something that you will work over on a longer term? Will
you try to have more rides which are spaced apart?
Arun K. Chittilappilly: I do not think this is a long-term issue, maximum two, three years
and either everybody will get the virus or everybody will get a vaccine.
These are the only two ways it is going to end. So, either way it will get
over in two, three years because people sitting at home and not going out
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and not meeting other people is counterintuitive and counterproductive
towards the human condition. We as people always want to connect with
other people or want to meet friends and family. No pandemic will be able
to change that; however, deadly that pandemic is. From what I am seeing
this pandemic is not as deadly as compared to the ones that have happened
100 years back, 500 years back. The only problem is we do not have
anybody living from those pandemics to tell us how they survived it. But
what I have seen is that human race provides many, many pandemics and
we are still doing the same thing. I do not think long-term there is an
issue, but for short-term maybe two, three years.
Aditya Bapat: Then whenever we construct a new park our theme for that or logic for
that will not change? It will be in line with what we see?
Arun K. Chittilappilly: The same and compared to a movie theatre or any other form of
entertainment, we are an open park. There is not really an indoor, closed
thing. Contrary to what people are saying, I do not think water parks will
accelerate spreading of virus, because here the water is sanitized. It is very
unlikely that if that was the case then everybody who comes to an
amusement park will get a cold because you should have got a cold and
people would have been falling sick a lot. But that has not happened in the
past. So, I do not think COVID is any different. It is also another form of
virus. So, I do not think over the long-term there are any effects, but then
it had changed the way people use technology and use certain services.
We will have to adapt to those for sure.
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Aditya Bapat: Thank you. All the best.
Moderator: Thank you. The next question is from the line of Anuj Sharma from M3
Investment. Please go ahead.
Anuj Sharma: Arun congratulations. Good to see you back. My first question is, beyond
parks do we also look to enter into adventure activities?
Arun K. Chittilappilly: We would not want to get into adventure sports by ourselves
because that is more skill based and there are other companies who do this
well. We might partner with them, for example in a resort. I do not think
we want to get into it directly. But it is an allied activity. So we are open
to doing it by partnering with other people.
Anuj Sharma: Any proposal on the table, Arun or it is just expectation?
Arun K. Chittilappilly: Which one?
Anuj Sharma: Adventure activities beyond what we do in our parks? Have we got
something on the table or it is just a thought as of now?
Arun K. Chittilappilly: As of now like you asked me the question, so I am telling you that
we are exploring it, but nothing is final yet.
Anuj Sharma: My second question is, it will be difficult for us to envisage what happens
over the next three to five years. The incremental parks which would be in
the northern or beyond south area? How do you look for expansion?
There are neighbouring countries like Sri Lanka or Bangladesh, do we
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also have to have some plans going beyond India. Just your thoughts on
new parks expansion? What are the key criteria you look at for opening?
Arun K. Chittilappilly: Obviously we look at weather and we look at the population size
in a 300-500 km radius. We are a regional park and so we are more akin
to Six Flags than a Disney. We are not a destination theme park like a
Disney hence you can compare us to Six Flags in the US because they
have multiple parks but they are all regional parks. So, that is the way we
want to operate. There are opportunities in other countries. We have been
approached by Sri Lanka and Bangladesh as well. We are currently
exploring an opportunity in Sri Lanka to see whether we can partner with
somebody, but it is too early to say whether we are going to take it up or
not. So, these kinds of opportunities keep coming and we will keep
exploring them. We find a space in terms of market price and the
philosophy of running the park if it matches with the other person, we will
definitely copartner with them.
Anuj Sharma: Just an extension, do we also look at the northern part of the country as a
place to expand or south is our forte?
Arun K. Chittilappilly: We are open to the Northern part. But if for example, in Delhi I
find the weather too extreme so we will have to close the park for four
five months which is not favorable for our industry. Maybe then we will
have to do something more indoor to keep away the weather and issues.
That is what the parks in Dubai have tried. They have tried to make a lot
of their parks indoors because the weather is bad. But I do not think Dubai
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experiment was successful. In spite of spending huge amount of money, I
do not think any of those parks made any money. The northern part of the
country definitely has more issues with weather and people wanting to go
out during all times of the year, so we will have to see what we can do
there.
Anuj Sharma: Thank you so much.
Moderator: Thank you. The next question is from the line of Sanket Goradia from
VEC Investments. Please go ahead.
Sanket Goradia: Good to have you back, Arun. Just one question from me as we are
broadly in outdoor entertainment company, are we looking to do
something from a more indoor activity, to get into some kind of gaming
for people who are in their homes, just as an extension?
Arun K. Chittilappilly: That is the other area that we are looking at, because how do we
make ourselves relevant to people in the digital era where people are
spending most of their time on phones especially kids who we target a lot.
So that is also something that we are looking at. It is in very early stages
to even talk about it, but yes it is of interest to us for sure.
Sanket Goradia: I understand it is too early, but is that something we are very serious
about? In terms of exploring either gaming or some kind of app based
work?
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Arun K. Chittilappilly: We are exploring it, but it is too early to comment, because I have
just come on board. These are discussions we are having right now, but it
is too early for us to make a concrete plan.
Sanket Goradia: Thank you. All the best.
Moderator: Thank you. Ladies and gentlemen due to time constraints that was the last
question for today. I will now like to hand the conference over to the
management for closing comments.
Arun K. Chittilappilly: Thank you all for attending the conference call for Q2 FY2021 of
Wonderla Holidays. We are confident that we will come back stronger
than ever and of course we will change with the times as well. I think
what COVID has done is like a good reset to the whole world and
stronger companies will definitely survive this and come out faster. We
hope that we are in that category and we are working towards that. Thank
you for your support.
Moderator: Thank you. On behalf of ICICI Securities Limited that concludes this
conference. Thank you for joining us. You may now disconnect your
lines.